Dhaka, Feb. 18 -- Banks are directed to form a separate dedicated unit each in a latest drive--sweetened with perks--to recover their written-off loans in the wake of worrying NPL buildups.

Bangladesh Bank or the central bank of Bangladesh Sunday issued a slew of directives for the banks to go by in the clean-up move, evidently attuned to reforms in the banking sector.

A write-off loan is a loan that usually does not show in the bank company's balance sheet. Banks use such write-offs for window dressing to clean up their balance sheet from non-performing loans. It happens when there is little scope for recovery of the loan.

The central bank says this is being executed in line with the best international practices to realize the bad loa...